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Americans Willing to Consider Reducing
Standard of Living to Ensure a Secure Retirement
LOS ANGELES--(BUSINESS WIRE)--Nov. 13, 2001--
2001 Transamerica Retirement Survey and Post-Sept. 11 Follow-Up Poll
Reveal Worker, Employer Attitudes Toward Retirement
As the shrinking Federal budget surplus puts new pressure on Social
Security, many Americans plan to boost their savings where they work or on
their own.
The 2001 Transamerica Retirement Survey, as well as a follow-up poll
taken after Sept. 11, reveal nearly nine in 10 think most Americans do not
salt away enough money to live comfortably throughout their retirement
years. More than half the employees polled say they are somewhat or very
likely to trim their lifestyles to set aside more for retirement.
The post-Sept. 11 poll also indicates that in the aftermath of terrorist
attacks against the United States, Americans are standing firm: 82 percent
of those polled in mid-October report their attitudes about saving for
retirement have not changed since the attacks. Their rationale includes:
"the economy is sound," "I have a good plan -- the attack
didn't affect the plan," "the system will rebound, and we'll come
back," and "I have confidence in the country."
However, there was a significant decrease in one measure of confidence
before and after Sept. 11, particularly among women. When asked how
confident they are that they will have achieved their retirement savings
goals by the time they reach retirement age, in the August survey, 21
percent of women and 30 percent of men said that they are "very
confident," compared with 8 percent of women and 28 percent of men in
the October survey.
For the third year in a
row(a), both surveys indicate retirement benefits
continue to outweigh compensation as a factor in choosing an employer. Most
survey respondents indicate that, all things being equal, they would prefer
a job that meets their salary requirements and has excellent retirement
benefits over a job with a higher salary but poor retirement benefits.
However, while the polls indicate that retirement programs like 401(k)
and profit-sharing plans are extremely popular benefits, poll data also show
many small businesses still don't offer them, and many employers do not
realize how important these benefits are to employees.
While less than one-quarter of workers say they are familiar with the
recent tax law changes regarding retirement savings, when asked about
specific retirement provisions, many workers express an interest in the
enhanced retirement savings opportunities.
"The majority of employees intend to take advantage of the enhanced
retirement savings opportunities that will be available in 2002 through the
tax-reduction bill(b) enacted in July," said Tom Schlossberg, president
and chief executive officer of Transamerica Retirement Services. "Two
out of three employees plan to take advantage of increased limits on
tax-deferred contributions to retirement plans at some point, and more than
half plan to eventually take advantage of 'catch-up' contribution
opportunities for workers age 50 plus."
Similarly, two out of three employers who are familiar with the increased
contribution limits and catch-up provisions think these new opportunities
will have an impact on their companies and their employees. However, the
survey data also show that many employers are not yet aware of the enhanced
pension provisions, less restrictive requirements and tax credits offered
through recent tax legislation to small businesses setting up new retirement
plans.
"We believe that as employers learn more about the increased ease
and reduced expense of setting up retirement plans for their employees, more
and more small businesses will offer their employees this much-needed
benefit," said Schlossberg.
While most employees plan to boost their savings, a large proportion of
workers -- four in 10 -- admit they do not know how much they will need to
feel secure in retirement. Almost 40 percent confess they obtained their
retirement savings estimate by guessing. "This underlines the
importance -- documented in our previous surveys -- of providing workers
with quality education about retirement planning," said Catherine
Collinson, senior vice president of Transamerica Retirement Services.
On the plus side, the vast majority of workers (86 percent) surveyed
report they do have some retirement savings and half started saving before
age 30. Seventy percent report that their company offers a retirement
savings plan, such as a 401(k) or profit-sharing plan, and among workers
whose company offers a plan, 80 percent say they participate. In addition,
six out of 10 workers currently save for retirement outside of work, such as
in an IRA or mutual fund.
Conducted by the research firm of Mathew Greenwald & Associates, the
first poll surveyed 500 workers and 200 employers in August 2001, with a
margin of error of four percentage points for workers and seven percentage
points for employers. The second poll was conducted Oct. 10-16, by International
Communications Research (ICR), and surveyed 226 workers, with a margin
of error of seven percentage points.
"Many small employers that don't yet offer a plan may think that
their workers wouldn't participate because their business can't afford to
match worker contributions," said Ruth Helman of Mathew Greenwald &
Associates. "But more than a third of the workers polled who don't
currently have access to a retirement savings plan say they would be very
likely to participate if their employer were to offer a plan -- even if
there were no match. Three-fourths of these workers said they would be very
likely to contribute if there were some type of employer match
involved."
Top-10(c) retirement services provider Transamerica Retirement Services
offers retirement plan products and services nationwide through Transamerica
Life Insurance and Annuity Co., Transamerica Occidental Life Insurance Co.,
AUSA Life Insurance Co. Inc. and Diversified Investors Securities Corp., all
members of the AEGON Group, one of the world's largest financial services
organizations(d). Retirement plan information is available to the public
toll free at 888/401-5826 or on Transamerica's award-winning interactive Web
site, www.TA-Retirement.com.
Note to Editors:
-- Reports on the Transamerica Retirement Survey as well as the
post-Sept. 11 follow-up poll, which include employee and employer attitudes
toward a variety of retirement planning issues, are available at
www.TA-Retirement.com or on request by calling Catherine Lockwood at
213/742-2977, Carol Bromberg at 213/742-4014 or Erick Kanter at
703/534-2150.
-- Interviews are also available on request.
(a) This is the third year Transamerica Retirement Services has
commissioned surveys to measure attitudes toward retirement. The previous
surveys were released in December 1998 and July 2000.
(b) The tax-reduction bill refers to the "Economic Growth and Tax
Relief Reconciliation Act of 2001" or "EGTRRA."
(c) Transamerica Retirement Services' ranking as a top-10 provider is
based on information in an April 2001 CFO MAGAZINE report, "CFO Buyer's
Guide: 401(k) Providers" about retirement services providers, based on
the number of plans in force.
(d) Based on assets (Source: WALL STREET JOURNAL, Oct. 1, 2001).
CONTACT:
Transamerica Retirement Services
Catherine Lockwood, 213/742-2977
catherine.lockwood@transamerica.com
Carol Bromberg, 213/742-4014
carol.bromberg@transamerica.com
or
Kanter Associates
Erick Kanter, 703/534-2150
erick.kanter@kanter-associates.com
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